Atlanta officials announced Friday that in preparation for the upcoming sale of debt for Hartsfield-Jackson Atlanta International Airport, a due-diligence review found a number of errors in classifying expenses dating back to 2003.
Officials said the impact of the changes for the 2003-2008 period would have reduced the airport’s surplus by an amount ranging from $10.4 million in 2003 to $19.7 million in 2008. The range of the impact of the errors changes the key debt-service coverage ratio to 1.33 in 2003, a reduction of 0.09, to 1.86 in 2008, a reduction of 0.12.
“All of the revised debt service coverage ratios remain well above the minimum required of 1.2,” said a release issued by Mayor Shirley Franklin’s office. “These changes will be reflected in a restatement of 2008 financial results as part of the fiscal year 2009 audited financial statements.”
The Department of Aviation has implemented the necessary controls to ensure that such errors do not recur, Franklin said. It is not clear if the accounting troubles will delay the airport debt sale.
In July, the City Council approved the sale of $1.4 billion of new-money and refunding bonds, with most of the proceeds going toward completion of the new international terminal at Hartsfield-Jackson.
The sale is expected to make use of the two-year holiday from the alternative minimum tax afforded by the federal stimulus act when Atlanta issues $800 million of airport revenue bonds and $590 million of refunding debt.
The refunding will fix variable-rate bonds that have experienced remarketing difficulties and increased debt service costs due to downgrades of MBIA Insurance Corp. It also will be used to terminate swaps with Goldman Sachs Mitsui Marine Derivative Products LP and JPMorgan.
Atlanta owns and operates the airport and issues debt for it. The terminal project is part of Hartsfield-Jackson’s $6 billion capital improvement plan and is scheduled to be completed by 2012.